Why Accounting Is Basically A Language And Information About The Financial Position Of An Organization

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“Without accountancy businesses would find it hard to function” Accounting Introduction Accounting is basically a language: a language that provides knowledge and information about the financial position of an organization. When we study accounting we are basically learning this expert language. By learning this language we can analyse and understand the financial operations of any and all forms of organizations. The accounting information be broken down into three core categories: Operating Information Another term for operating information is “day-to-day information”. It is the type of accounting information which is needed by the organization itself to conduct its business such as paying the employees, tracking sales or payments from existing debtors and also information regarding payments to creditors. The operating information is basically related to the working capital of the business. Operating information comprises the supreme amount of accounting information and also provides the foundation for the other two types of accounting information. Financial Accounting Information This is the type of information that is used by stakeholders such as managers, shareholders, creditors, banks, the public, the government, etc. to make choices involving the organization and its activities. Shareholders would want information regarding their investment; whether it is worth it and whether they should buy or sell shares, bankers and creditors would want to know if the
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